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    HomeNewsBusinessIPOTarsons Products IPO sees 77.49 times subscription on final day of bidding

    Tarsons Products IPO sees 77.49 times subscription on final day of bidding

    Tarsons Products IPO | With the fresh issue proceeds, the company will repay its debt and meet capital expenditure for a new manufacturing facility at Panchla, West Bengal.

    Moneycontrol News
    November 17, 2021 / 17:19 IST
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      The initial share sale of Tarsons Products, a manufacturer of labware items, has seen 77.49 times subscription on the final day of bidding on November 17 as it garnered bids for 84.02 crore equity shares against an offer size of 1.08 crore units.The reserved portion for retail investors was subscribed 10.56 times and that of employees 1.83 times. The company has reserved 60,000 equity shares for its employees.Qualified institutional investors have bought shares 115.77 times the portion set aside for them and non-institutional investors have put in bids 184.58 times the portion reserved for them.The company launched its initial public offering for subscription on November 15 that consists of a fresh issue of Rs 150 crore and an offer for sale of 1.32 crore equity shares by selling shareholders.This initial share sale is likely to fetch Rs 1,023.84 crore to the company. It mopped up Rs 305.96 crore from anchor investors on November 12 at the higher end of the price band of Rs 635-662 per equity share.With the fresh issue proceeds, the company will repay its debt and meet capital expenditure for a new manufacturing facility at Panchla, West Bengal.“At higher price band of Rs 662, Tarsons Products is demanding a P/E (price-to-earnings) multiple of 51.1x (to its FY21 EPS of Rs 12.9), which is at a premium to the proxy peer average of 35.7x. Also, the demanded valuation is at a premium to global peer average of 36.2x. Thus, the issue seems to be fully priced,” Choice Broking said.

      Also read - Tarsons Products IPO | 10 things to know before you subscribe

      Tarsons Products is the beneficiary of the COVID-19 pandemic. “With respect to its performance in FY20, its business and profitability increased drastically in the pandemic year. However, we believe that the current business growth and profitability expansion are not sustainable,” it said. The brokerage believes that there is a respectable import market for the company to capture and also a huge export opportunity if the West adopts the ‘China plus one’ strategy. “Thus, considering the future growth outlook and the demanded premium valuation, we assign a ‘subscribe with caution’ rating for the issue,” Choice Broking said. Click Here To Know All IPO Related NewsTarsons Products is an Indian labware company engaged in designing, development, manufacturing and marketing of consumables, reusables and others, including bench-top equipment, serving customers like the Indian Institute of Chemical Technology, the National Centre for Biological Sciences, Dr Reddy’s Laboratories, Syngene International, Metropolis Healthcare and Dr Lal PathLabs.In value terms, the domestic plastic labware market was estimated at Rs 1,225 crore in 2020 and is likely to average an annual compounded growth rate of 16 percent to reach Rs 2,576 crore by 2025. Moreover, the global plastic laboratory products market is expected to expand to $13.8 billion by 2025 from $8.4 billion in 2020 (a CAGR of 10.5 percent).Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
      Moneycontrol News
      first published: Nov 17, 2021 10:14 am

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